The lawsuit, filed on Friday in the U.S. District Court for the Northern District of California, marks a significant escalation in tensions between the two technology giants, whose relationship has evolved from strategic partners to potential competitors in the rapidly growing artificial intelligence industry.
In its complaint, Apple alleged that OpenAI orchestrated a coordinated effort to obtain and exploit the iPhone maker's confidential hardware information by recruiting former employees and leveraging supplier relationships to fast-track the development of its own consumer devices.
According to Apple, the alleged actions were aimed at giving OpenAI an unfair advantage as it moves beyond software and into AI-powered hardware, a market that analysts believe could eventually challenge the dominance of the iPhone.
Responding to the allegations, OpenAI denied any wrongdoing.
"We have no interest in other companies' trade secrets," the company said in a statement.
"We remain focused on building innovative technology that empowers people everywhere."
The legal battle underscores the intensifying rivalry between the companies as competition in artificial intelligence increasingly extends into consumer hardware. Industry analysts believe OpenAI is developing an AI-powered smartphone or another consumer device that could reduce users' reliance on traditional mobile operating systems and app ecosystems.
PP Foresight analyst Paolo Pescatore said the dispute reflects a broader strategic shift in the relationship between the two firms.
"Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers," Pescatore said.
"Even if the allegations are not proven, the lawsuit could delay OpenAI's hardware ambitions and further weaken what is already becoming an increasingly fragile partnership."
Apple alleges misuse of confidential information
Apple named two former executives in the lawsuit—Chang Liu, a former senior system electrical engineer, and Tang Yew Tan, Apple's former vice president of product design for the iPhone and Apple Watch.
The company alleged that Liu failed to return a company-issued laptop and later exploited an authentication vulnerability to gain access to Apple's internal systems, where he allegedly downloaded dozens of confidential hardware-related documents.
Apple further accused Tan, who spent nearly 24 years at the company leading product development for the iPhone and Apple Watch, of systematically collecting confidential supplier information and internal industry reports before joining OpenAI.
According to the complaint, Tan allegedly emailed sensitive company information to himself before leaving Apple and encouraged prospective OpenAI recruits to bring Apple hardware components to job interviews for what the lawsuit described as "show and tell" sessions.
Apple cited one incident in which a job candidate allegedly remarked that he "didn't even know we could take those from the office."
The lawsuit also names OpenAI Foundation, OpenAI Group PBC—the company's commercial arm—and io Products, the hardware startup acquired by OpenAI, as defendants.
Apple says concerns were ignored
In its filing, Apple said it contacted OpenAI in February to express concerns that its confidential information may have been used within the company and requested discussions on the issue.
According to Apple, OpenAI did not respond.
The iPhone maker also noted that more than 400 former Apple employees now work at OpenAI, acknowledging that while employees are free to change jobs, confidential business information remains protected under the law.
"That OpenAI now employs people who were once entrusted with Apple's trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts," Apple stated in its complaint.
Apple further alleged that OpenAI employees sought confidential manufacturing knowledge from Apple suppliers, including requesting a supplier to perform a proprietary metal-finishing technique under the assumption that Apple had authorised its use.
Legal experts weigh implications
Legal experts say the lawsuit could become one of the most closely watched intellectual property disputes in the AI era.
Stanford Law School professor Mark Lemley said hiring former employees is generally lawful in California, where employment mobility has long been encouraged.
"But if Apple's claims that the employees took confidential documents with them — and that OpenAI is using those documents — are true, that is a problem for OpenAI," Lemley said.
Rutgers Law School professor Camilla Hrdy noted that while trade secret disputes are common in the technology industry, this case stands out because it focuses largely on hardware rather than software.
"These trade secret lawsuits are frequently brought in the tech space, and we usually learn much, much more as the case develops. OpenAI is not a defendant that can't afford to defend itself," she said.
Partnership under growing strain
The lawsuit comes despite an existing partnership between Apple and OpenAI.
Last year, Apple integrated ChatGPT into its Apple Intelligence platform, allowing Siri to access OpenAI's chatbot for more advanced responses. iPhone users can also subscribe to ChatGPT directly through iOS settings.
However, the collaboration has increasingly been overshadowed by growing competition as both companies pursue leadership in AI-powered consumer technology.
OpenAI's acquisition of hardware startup io Products—founded by legendary former Apple designer Jony Ive—in a $6.5 billion deal last year further fuelled speculation that the company intends to compete directly in the consumer hardware market. Although Ive is closely associated with the project, he is not named as a defendant in Apple's lawsuit.
The case is expected to test the boundaries of trade secret protection, employee mobility and competition in the rapidly evolving artificial intelligence industry, with potentially far-reaching implications for both Silicon Valley and the future of AI-powered consumer devices.